Economists See An Upturn In Miamidade Economy Despite Spending Lag
Written by Jacquelyn Weiner on April 1, 2010
By Jacquelyn Weiner
Consumer spending in Miami-Dade is still suffering year-over-year, newly unveiled taxable sales figures indicate, but some economists say they hint at an upturn just beginning.
Spending on consumer nondurables in Miami-Dade fell 1.3% in January from January 2009 levels, according to the most recent taxable sales numbers from the state legislature’s Office of Economic and Demographic Research.
These consumer nondurables taxable sales were negative all of 2009 except for a 0.3% rise in December — prime holiday shopping time.
"The weakness in taxable sales of consumer goods is troubling," Miami-Dade County chief economist Robert D. Cruz wrote in the county’s to-be-released monthly economic indicators report. "Consumer spending in Miami-Dade, excluding autos, was on a negative trend from October through January, after considering the usual seasonal variations."
In total, Miami-Dade taxable sales were down 1.8% year-over-year in January.
And statewide, taxable sales were down 4.6% in January compared to January 2009.
With seasonal fluctuations factored in, Miami-Dade’s taxable sales in January were "11% lower than in January 2009," Mr. Cruz wrote.
In addition, "January taxable sales compared to December were down in all major categories, except for tourism and recreation, which was up 2.7% on a seasonally adjusted basis," Mr. Cruz wrote. "Tourism is the only major sales category that is practically on par with January 2009 levels."
Still suffering by double digits was building investment, which fell 17.1% in January year-over-year.
Consumer durables posted the second largest drop, 7.3%.
The combined declines in building materials and business equipment "accounted for approximately 70% of the [December] to January decline in total taxable sales," Mr. Cruz wrote. "Building materials and business equipment fell 6.6% from [December] to January on a seasonally adjusted basis, and were down 8% compared to January 2009."
Construction is expected to continue suffering into the future, said Sean Snaith, director of the Institute for Economic Competitiveness at the University of Central Florida.
"That sector of our economy still remains in a pretty dire state," Mr. Snaith said. "I don’t see construction turning around until maybe the end of 2011."
Mr. Snaith said that looking at changes month-to-month doesn’t give a whole picture of financial trends because "seasonal factors sometimes obscure what the underlying trend in the data might be."
But overall, Mr. Snaith said he sees Florida "emerging from recession in this quarter."
"I would expect by March or April to see some actual stabilization in taxable sales," Mr. Snaith said. "Not necessarily a huge increase, but I think we should be flattening out."
Amy Baker, chief economist for the state legislature, agreed that recovery is likely to be gradual.
"Some things are going to be outperforming other areas as we move along," Ms. Baker said.
One area of taxable sales that has the potential to recover more quickly, Ms. Baker said, is business investment.
Business investment in Miami-Dade fell 6.2% in January from January 2009 and was flat compared to December 2009.
"A lot of businesses are sitting on cash," Ms. Baker said. "Once they feel more comfortable, then they can start making purchases pretty quickly.
Although taxable sales are "slightly down from the previous year," the numbers are "moving in a positive direction, said economist Manuel Lasaga, president of StratInfo.
He predicted Miami-Dade sales would show year-over-year gains by the end of the first quarter.
It is "just about ready to cross the line into finally positive growth," he said.
In addition, Mr. Lasaga said, the overall economic picture for Miami-Dade may be rosier than taxable sales numbers indicate.
"We have to take into consideration that this measure is limited because it doesn’t include wholesale business," Mr. Lasaga said.
For example, US exports have "been doing well in the past year as a result of a weak dollar," he said, but they aren’t reflected in taxable sales.
"These [taxable sales] numbers might, if anything, be underestimating," Mr. Lasaga said. "We may already be in positive territory."
Also not accounted for are online purchases, which Mr. Lasaga said have been "very positive."
They are so significant, he said, that "we’re going to start to have to disclose when we make references to these statistics that they do not include online sales."